The European Union has been wrangling over a Spanish initiative to strengthen its assistance programs to Islamic countries around the southern rim of the Mediterranean. European Commission President Romano Prodi says helping that volatile region is a priority, but members are still having difficulty focusing on that long-neglected area.

Prague, 6 March 2002 (RFE/RL) -- Spain, with its long history of contacts with the Islamic world, is more aware than most European countries of the dangers emanating from across the southern Mediterranean. The bodies of would-be illegal immigrants regularly wash up on Spanish shores, bearing testimony to the growing determination of people living in that region to seek a better life.

From Morocco in the west, through Algeria and to Lebanon in the east, there exists social tensions in varying degrees, and in some places outright conflict. Poor economic conditions and rapidly growing populations provide ideal conditions for the growth of Islamic extremism. Algeria is already deeply mired in a war against extremists.

With these facts in mind, Spain -- the current EU president -- has proposed the creation of a new bank that would focus on investing in the Mediterranean-rim countries -- just as the European Bank for Reconstruction and Development focuses on the development of the transition economies of Europe.

The idea was taken up by the European Commission in Brussels but did not find favor among some member states. Critics saw it as unnecessary duplication of effort, in that the EU's development bank, the European Investment Bank (EIB), is already heavily engaged in the region.

Then the commission adopted the more modest aim of creating a subsidiary of the EIB for the area. But this proposal also has run into resistance, with some member states again saying that existing institutional arrangements are sufficient.

The way the project has been scaled down illustrates the difficulty that the EU -- preoccupied with eastward expansion -- is having in trying to prioritize the Arab region. As analyst Paul Brenton of the Centre for European Policy Studies in Brussels puts it: "For many, many years, that region has been relatively neglected. I mean, it took quite a time to sort out a coherent policy after the southern enlargement of the EU [in 1986 with Spain and Portugal]. And then along has come Central and Eastern Europe, which has focused resources and minds away from that area. And perhaps the danger also is that once we have the eastern enlargement, then there will be a lot of attention on the northern borders of the EU [on Russia and Ukraine], and again the southern borders may well be neglected."

Analysts say that would be a mistake, given the risks of instability in the southern Mediterranean. Hadeja Mohsun-Finan of France's Institute for International Relations says the situation in Morocco and Algeria, for example, could become "explosive" very quickly: "The number of people out of work and illiterate in Morocco is in any case alarming. Already, several decades ago, the World Bank drew attention to these dreadful figures and to the fact that the region cannot register real stability with social divisions as wide as they are."

Mohsun-Finan says it is imperative for Europe to make more of an effort to help the southern-rim countries, not least out of self-interest. Successful economic development of the region would mean a reduction in the growing flood of emigration to the EU.

Not everyone is pessimistic about the present level of assistance to Muslim countries, however. They note that the capacity of those countries to absorb aid meaningfully is limited by factors such as poor infrastructure. In addition, a spokesman for the European Investment Bank notes that setting up a new bank would come at a high price.

Paul Loeser, speaking from Luxembourg, said: "Setting up a new bank takes time, and in the end that would be a bank which would be much more costly to run. But also, if you have high costs, administrative costs, et cetera, you have to charge very high prices for your credit. That's obvious."

And Loeser says that, in any case, the EIB is heavily engaged in the region and can show results. He says it has loaned money for such things as environmental projects, harbor development, gas pipelines, and that it also finances small and medium-sized businesses, as well as heavy industry.

"We have already close contact with the region. We are lending about 1 billion euros (more than $850 million) per year over the last five years. And in the last year -- 2001 -- it was even 1.5 billion [euros]. So we are quite well-acquainted with the region. The question now is to make an even bigger effort in order to give new impetus to the Barcelona process."

The Barcelona process is the dialogue between the EU and the southern Mediterranean countries, which has been going on in a desultory form since the mid-1990s. Spain hopes to revitalize the dialogue at next month's Euro-Med summit in the Spanish city of Valencia.

One hindrance to the development of healthy economies in the region is posed by the generally authoritarian regimes in North Africa. Analyst Mohsun-Finan says the complexions of the political regimes in the region have basically not changed since gaining their independence from colonial rule. She says there has been a start to democratization in Morocco, but that in Algeria, Tunisia, and Libya, there is a problem of the legitimacy of power.

The analyst says the regimes justify their authoritarian ways by referring to the need to suppress extremism. She describes this as a myth: "We find today, however, all this is just talk, just rhetoric, and that Islamism does not retreat in front of authoritarianism, or in the face of muscular regimes. Islamism retreats when the soil nurturing it is not there, because the elements which have favored its emergence disperse -- for example, [through economic] development -- and also [because of] the participation of all the citizens in the public life. That is to say, an opening to democracy."

The EU is said to be particularly keen to develop small and medium-sized businesses in the southern Mediterranean region, on grounds that a prosperous and growing middle class will contribute to political liberalization.

As to the question of increasing assistance to the region, the EU is expected to decide what to do at its coming Barcelona summit in mid-March.